Budgeting and Forecasting Services

Budgeting and forecasting are common processes for a successful business.

They are often linked together but they’re different. Budgeting and forecasting will make you think about your business model and how if something changes what impact this will have on you.

What is Budgeting?

The budget includes details about the company’s income, expenses, cash flow and financial position and is often prepared for a year and remains unchanged.

What is Financial Forecasting?

A forecast is a high-level projection of what will happen, often just key revenue items and overall expenses. Forecasts can be done for different periods.

A long-term forecast might cover several years and be included in your business plan. Short-term forecasts are generally done for operational reasons and can be for a week at a time when a business is experiencing cash flow problems.

We can help you prepare your budgets and forecasts but once you’ve prepared them what can you get from them to help manage your business? We can review them with you and advise on:

• • Are you going to make a profit? And if so, is the projected profit a reasonable return?
  • Do you need outside finance? If so, how much and what sort of finance? Equity or debt?
  • Does the strategy look reasonable?
  • What happens if your turnover falls by 10%? What happens if your turnover increases by 10%?

It is critical you constantly review your actual performance against budget. Variances need to be built into your forecasts so you can identify if you need extra staff or stock. Will additional sales create a cash flow problem?

Understanding more about your business will help you react to the changing business environment.

Business Growth

No matter where you are in the business cycle, you can always improve.

To grow your business, you’re going to need plenty of help along the way. You’re going to allocate your time to concentrate on the important things, turning your ideas into reality. It’s a tough journey but we can help you in several ways:

• • Structure– we can help you decide on the appropriate business structure for your journey. Tax is an important part of the decision but there are other factors you need to consider, and we can help you with these.

• • Forecasting & budgeting– the best run businesses operate strict forecasting and budgeting processes. We can help you develop these and monitor actual performance against your forecasts to ensure you are performing as expected.

• • Profit improvement– profit is the lifeblood of every business and for sustained growth you need to maximise profits. We can look at your business model and advise on improving profitability.

• • Tax planning– tax is cash going out of the business, so you need to make sure you retain as much as possible. We can advise on tax efficient remuneration, capital allowance claims, R&D tax credits and a whole host of ways of reducing your tax burden.

• • Staff rewards– you can’t grow the business on your own, you need incentivised staff to achieve your goals. Whether it’s private health care, company cars, share schemes or other benefits, we can tailor remuneration packages for your circumstances.

• • Compliance– every business needs to be compliant and rapid growth can sometimes result in tax obligations being missed. We can help with your PAYE, VAT and corporation tax to make sure you’re compliant. It might not sound like much, but when you come to sell, a good compliance history can only enhance your value.

Profit Improvement

Working together, we can set targets for profitability and monitor your ongoing performance to ensure it improves.

The key to profit improvement is knowing where your profit comes from and understanding your business model. We can help set up your systems to identify where you are making your profits (or losses), so you know what products or services generate a return.

Without this information it is difficult to introduce change, but once you have it we can work with you to develop a strategy for increasing profitability.

Working together, we can set targets for profitability and monitor your ongoing performance to ensure it improves. We can:

• Review your pricing strategy and see if you are making the margin you think you are. Discounts can be a very expensive way of generating sales and can eat into your profits.
• Look at your office processes and see if it is possible to introduce time-saving cloud-based applications.
• Analyse your overhead to see if you are getting value for money from your suppliers.
• Evaluate your payment processes and credit control can often be streamlined so cash arrives in your bank quickly and efficiently.
• Assess your payment terms to see if they are in line with industry standards, and if so, are they being followed.
• Prepare forecasts so we can fully understand your business model and the interaction of the various components.
• Compile management accounts to compare to the forecasts and react to changes in the business environment.
• Advise on tax issues to increase retained profit.

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